WBR Group welcomes the opportunity to respond to the technical consultation, announced in the Autumn Budget 2024. As a Group containing both Independent Trustee and Pension Scheme Administrator (PSA) companies providing services to thousands of clients with Small Self-Administered Schemes (SSAS) we have taken a keen interest in the proposals outlined by HMRC.
We are pleased to publish our executive summary from our extensive response to HMRC’s consultation on the inclusion of ‘unused pensions’ into the scope of inheritance tax (IHT).
We believe the proposals are overly complicated and will present a poor outcome for beneficiaries and personal representatives. They also cause significant challenge for trustees and providers.
In addition, the proposals do not acknowledge the reality of the decision-making process on discretionary death benefits from pension schemes, the various parties involved, or the existing challenges that trustees currently face.
- The time limits for information submission are unworkable and are not suitable for schemes where there are discretionary death benefits.
- The questions asked in the consultation do not appear to consider the complexities of many occupational schemes like SSASs.
- More consideration should be given to vulnerable customers in what could be particularly challenging circumstances, and the impact that this could have on their wider emotional, mental, and financial wellbeing.
- It’s obvious from the consultation that HMRC are assuming that pension scheme administrators will have liquidity to pay any IHT due within the timescales. For many schemes, this will not be the case and in the instance of SSASs, the trustees will need to provide their agreement to asset liquidation.
- The consultation relies on people having an understanding and awareness about their various pensions. The time limits suggested for implementation of these proposals may mean that a considerable number of people do not have this awareness.